Enterprise and the War

At 1941's most glamorous convention, U.S. industry voiced its deepest hopes and fears last week--just in time, before Japan put an end to talk. The 46th Congress of the National Association of Manufacturers at Manhattan's Waldorf-Astoria was the best attended Congress (over 5,000) in N.A.M. history. It was also the first N.A.M. Congress in almost a decade whose deliberations seemed in step with the times.

The manufacturers' role had a new importance, and they felt it. Said Alfred P. Sloan: "The war abroad can only be won on the American industrial front." They knew that even their old enemy Franklin Roosevelt--let alone the U.S. people--needed them now.

They also knew they could meet the assignment--had already begun to meet it. Said Blau-Knox's William Porter Witherow, new N.A.M. president: "In the first seven months of 1941, American manufacturers sent to England nearly twice as many combat planes as were lost defending the British Isles during the whole preceding year. . . . No matter how frequently the specifications are raised, industry will produce to meet them."

Even N.A.M.'s annual protest against New Deal labor policy was not, for once, the cry of the alone to the alone. As though for N.A.M.'s special benefit, Howard Smith's strike-control bill passed the House on the first day of the convention. When Smith appeared at the Waldorf next day, he was given an ovation. The challenging power of the unions, always N.A.M.'s chief concern, was still the favorite topic in the corridors. The Congress also refought some other old N.A.M. ideological wars: bureaucracy, Government spending, the public debt, "unwise taxation" (N.A.M. wants a general sales tax). The Congress was vitally concerned with how to make sure private enterprise survives this war. It was also concerned with how production can best be organized to win it. On both subjects it heard some significant speeches:

Donald Nelson bluntly told the manufacturers that "if private enterprise is going to come through this ordeal it has got to undergo considerable improvement." Despite industry's "amazingly fine" defense record in 18 months, "production at that rate won't beat Hitler. It won't even keep Hitler from beating everybody else. . . . At the very least that production volume must be doubled." He urged them to take more initiative in seeking contracts and supplies; before running to Washington, "go out and wear out a little shoe leather."

Leon Henderson for the first time made public his utter dissatisfaction with the emasculated House price-control bill. To prevent inflation he said he needed at least two powers which the House refused him: 1) power to buy & sell commodities, (to avoid the "bulk-line," or one-high-price system of World War I); 2) power to license, without which "price control is virtually impossible where the number of sellers is large"--e.g., in the retail field.

Alfred P. Sloan, who had "little doubt as to our ability to win the war," discussed ways for industry to meet the challenge of peace. "There will be a demand for a more complete utilization of the nation's economic resources . . . a political demand that no administration will ignore. We of industry . . . must take the initiative in both planning and action. . . ." To that end, "we should not curtail our research during the emergency." Although there may be no great single new industry to spark the post-war transition, there will be much rebuilding to do ("the American production plant is obsolete"), many a new opportunity. General Motors, he revealed, is already developing a bank of new or improved products--what lie calls G.M.'s "A.H." (after Hitler) program.

Most thoughtful speech of the week was that of Brookings Institution's Edwin G. Nourse, who outlined a future for private enterprise in terms of its past. The enterprise system, he said, has already graduated from perfect freedom to a self-disciplined, professional, "scientific" form. "The low prices at which cellophane and nylon were introduced . . . were not due to a buyers' strike or to the direct competition of other companies. . . . It reflected a high type of scientific price-making on the part of the Du Pont Company."

Primitive free enterprise, said he, was irresponsible and daring. The modern variety is (or is becoming) responsible, "marked by a shift from management in the aristocratic tradition of personal proprietorship to the democratic philosophy of non-partisan administration." But the danger is that it should lose its daring. In the fear that Government will out-promise and submerge a timorous enterprise system, "thus far business has relied too fully on the negative principle, 'I want to be left alone.'"

The dilemma of the private enterpriser is his duty to safeguard capital in a political environment he mistrusts, while his only chance of preserving the system is by taking new risks--"by exercising enterprise as well as by being private." This dilemma, said Nourse, would be resolved if the whole class of enterprisers got going at once. "Risk which would be intolerable for the individual concern shrinks to bearable proportions if private business as a whole adopts and executes a concerted strategy of advance." In other words, private enterprise need have no fear of its post-war existence, if enough enterprisers will believe in it.

. . . .

The tycoons had gone home when war was declared. But retiring President Walter D. Fuller and new President Witherow put them on record in a message to President Roosevelt:

"Industry will build two battleships for every one that sinks. . . .

"It will blacken the sky with planes. . . .

"The enemies of our democratic way will find us one unbreakable phalanx in which class, creed and petty politics are forgotten."

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